[GRAPHIC OMITTED][GRAPHIC OMITTED]
First Quarter News Release and Statistical Supplement (Unaudited)
April 19, 2005
Table of Contents
Page
Earnings News Release 1-6
Financial Supplement Introduction SS-1
Financial Measures Used by Safeco SS-2
Consolidated Results
Key Metrics SS-6
Consolidated Statements of Income SS-7
Condensed Balance Sheets SS-8
Continuing Operations Income Summary SS-9
Property & Casualty Results
Underwriting Profit (Loss) and Combined Ratios SS-10
Net Written Premiums SS-11
Net Earned Premiums SS-12
Safeco Personal Insurance (SPI) SS-13
Safeco Business Insurance (SBI) SS-14
Surety, Other and Total SS-15
Statutory Information SS-16
Corporate Supplemental Information
Investment Portfolio SS-17
Capitalization SS-18
[Safeco Logo]
FOR RELEASE AT 7:45 a.m., Eastern Time
INVESTOR RELATIONS CONTACT: Neal Fuller, 206-545-5537
MEDIA RELATIONS CONTACT: Paul Hollie, 206-545-3048
SAFECO REPORTS STRONG FIRST-QUARTER RESULTS
Focus and Consistent Execution Drive Performance
SEATTLE--(April 19, 2005)--
Highlights
o Strong underwriting profits in all major lines of business.
o First-quarter net income of $212.0 million.
o Revenues of $1.58 billion - a 5.5% increase over 2004 levels.
- --------------------------------------------------------------------- -----------------------------------
Summary Financial Results after tax
(In millions except per-share data) 3 Months Ended March 31
- --------------------------------------------------------------------- -----------------------------------
2005 2004
- --------------------------------------------------------------------- ----------------- -----------------
Net Income $ 212.0 $ 236.2
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Per Diluted Share of Common Stock $ 1.65 $ 1.69
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- --------------------------------------------------------------------- ----------------- -----------------
Income from Continuing Operations $ 212.0 $ 185.6
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Net Realized Investment Gains from Continuing Operations $ 22.0 $ 27.8
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*Operating Earnings - Continuing Operations $ 190.0 $ 157.8
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- --------------------------------------------------------------------- ----------------- -----------------
Income from Discontinued Operations $ --- $ 50.6
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Average Shares Outstanding (Diluted) 128.2 140.0
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* Operating Earnings is Income from Continuing Operations, excluding Net Realized Investment Gains
(Losses). Measures used in this news release that are not based on accounting principles generally
accepted in the United States (GAAP) are defined and reconciled to the most directly comparable GAAP
measure in our Form 8-K available through the SEC and online at http://www.safeco.com/irsupplements.
- ---------------------------------------------------------------------------------------------------------
Safeco (NASDAQ: SAFC) today reported strong first-quarter results,
reflecting the company's clear property and casualty (P&C) focus, disciplined
underwriting and consistent execution.
The company produced net income for the first quarter of $212.0 million, or
$1.65 per diluted share. This compares with net income of $236.2 million, or
$1.69 per diluted share, for the same period last year. Last year's net income
result included $50.6 million of income from Safeco's discontinued life and
investments operations, which the company sold in August 2004.
Operating earnings from continuing operations for the first quarter were
$190.0 million, up from $157.8 million in the prior-year period.
After-tax net realized investment gains from continuing operations for the
quarter were $22.0 million,
compared with $27.8 million in first-quarter 2004.
"Our P&C focus continues to serve us well, even in these more difficult
market conditions," said Mike McGavick, Safeco chairman and chief executive
officer. "We're maintaining strong margins because of our underwriting
discipline and commitment to profitable growth."
The overall P&C combined ratio for the first quarter was 88.5 versus 89.9
in the same quarter last year. (Combined ratio represents the percentage of each
premium dollar spent on claims and expenses - the lower the ratio, the better
the performance.)
Catastrophe losses for the first quarter were $24.8 million pretax,
compared with $11.6 million in the first quarter last year.
Safeco's annualized return on equity (ROE) for the quarter was 21.4
percent. Annualized operating ROE - measured using operating earnings and
excluding from equity unrealized gains/losses on bonds - was 20.1 percent for
the quarter.
Total revenues in the first quarter were $1.58 billion. Operating revenues
from continuing operations, which exclude net realized investment gains, were
$1.55 billion, up 6.3 percent from the same quarter in 2004.
P&C net earned premiums were $1.43 billion for the quarter, a 6.6 percent
increase over first-quarter 2004 levels. P&C net written premiums increased to
$1.46 billion for the quarter, up 5.9 percent compared with the same period last
year.
"While our growth rate has slowed due to increased competitive pressures,
we are pleased with our ability to continue to add risks that meet our standards
at a faster rate than the industry overall," said McGavick.
P&C pretax net investment income for the quarter was $113.0 million, an
increase of 1.2 percent compared with the same period a year ago.
Safeco's results for the quarter reflect a $10.0 million tax benefit,
stemming primarily from the favorable resolution of a state tax-related issue.
The company also realized a $9.0 million tax benefit in the same quarter a year
ago.
Safeco Personal Insurance
Safeco Auto reported a first-quarter pretax underwriting profit of $30.1
million, compared with $23.1 million in the same period a year ago. Auto's
combined ratio was 95.7 in the quarter, compared with 96.3 a year ago.
Auto net written premiums rose 10.0 percent in the first quarter, compared
with the same quarter last year. Policies in force (PIF) grew 7.4 percent over a
year ago. New-business policies issued declined 10.8 percent compared with the
same quarter in 2004. Retention of existing policyholders remained stable over
first-quarter 2004 levels.
"Auto is one of the lines where competition has grown, so our slowdown in
new sales is no surprise," said McGavick. "At the same time, the quarter saw the
launch of our latest- generation auto product, SNAP 2.0, which we believe will
further advance our sophistication around risk selection."
Safeco Property produced a first-quarter pretax underwriting profit of
$56.0 million, compared with $61.4 million in the same period a year ago.
Property's combined ratio was 75.4 in the quarter, compared with 73.1 a year
ago. The first-quarter 2005 combined ratio included $19.6 million in catastrophe
losses, $11.8 million of which were related to the 2004 hurricanes.
Property net written premiums rose 0.3 percent in the quarter over the
prior-year period. PIF declined 5.2 percent over a year ago, and was flat
compared with year-end 2004. New-business policies issued increased 48.4 percent
compared with the same quarter a year ago, and retention improved almost a full
point.
"We're very excited by our prospects in Property insurance. Having spent
much of the past several years fixing the homeowners line, we are finally seeing
our ability to grow new business as well as earn a profit. With our new-business
growth and improving retention, we expect to turn PIF-positive in 2005," said
McGavick. "Our Claims organization stands ready to handle the expected higher
incidence of catastrophes we usually see in the second quarter - traditionally
our weakest earnings quarter due to catastrophes and severe weather."
Safeco Business Insurance
Safeco Business Insurance (SBI) reported a pretax underwriting profit of
$57.1 million in the quarter, compared with $42.3 million for the same period in
2004.
The combined ratio for the quarter was 86.4, an improvement over the 89.9
combined ratio posted a year ago.
SBI Regular - Safeco's core line of commercial products for small- to
medium-sized businesses - reported a pretax underwriting profit of $46.9 million
in the quarter, compared with $23.8 million for the same period last year. The
SBI Regular combined ratio in the first quarter was 85.1 compared with 92.1 in
the same period last year, driven by favorable frequency trends and
lower-than-expected catastrophes and weather.
SBI Regular net written premiums increased 3.6 percent during the first
quarter compared with the same period last year. PIF declined 0.3 percent
compared with year-ago levels. New-business policies issued for the quarter
decreased 9.0 percent compared with the same quarter last year, with retention
of existing customers holding steady.
"Our automated lines of business, especially commercial auto and BOP,
continued to perform well - with strong margins, net written premium growth of 9
percent and PIF growth of 5 percent," said McGavick. "With our recent addition
of 62 new classes of coverage on the automated BOP platform, we are optimistic
we can continue to drive growth. Middle-market commercial, however, is more
competitive. We are maintaining our underwriting discipline, and Safeco
technology, service and claims will give us a competitive advantage across our
commercial business."
Surety
Safeco Surety reported a pretax underwriting profit of $14.8 million in the
quarter, compared with $9.3 million for the same period in 2004. Surety's
combined ratio was 75.1 for the quarter, compared with 79.6 a year ago. Net
written premiums grew 22.6 percent over the same period last year.
Additional Financial Information Available
Safeco uses both GAAP and non-GAAP financial measures to track the
performance of its operations. The definition of each non-GAAP measure and
reconciliation to the most directly comparable GAAP measure is included in
Safeco's Form 8-K that will be furnished to the U.S. Securities and Exchange
Commission today.
The Form 8-K will include this news release and Safeco's summary financial
results, consolidated statements of income and condensed balance sheets in the
company's first-quarter financial supplement.
Safeco's press release, financial supplement and 8-K are available online
at http://www.safeco.com/irsupplements.
Management Reviews Results on Webcast
Safeco's senior management team will discuss the company's first-quarter
performance with analysts today at 11 a.m., Eastern Time (8 a.m., Pacific Time).
The conference call will be broadcast live on the Internet at
http://www.safeco.com/irwebcast and archived later in the day for replay.
Safeco, in business since 1923, is a Fortune 500 property and casualty
insurance company based in Seattle. The company sells insurance to drivers, home
owners, and owners of small- and medium-sized businesses through a national
network of independent agents and brokers. More information about Safeco can be
found at www.safeco.com.
###
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FORWARD-LOOKING INFORMATION CONTAINED IN THIS
NEWS RELEASE IS SUBJECT TO RISK AND UNCERTAINTY
Forward-looking information contained in this release is subject to risk and
uncertainty. Information contained in this release that relates to anticipated
financial performance, business prospects and plans, regulatory developments and
similar matters are "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. Statements in this release that are
not historical information are forward-looking. Our business is subject to
certain risks and uncertainties that may cause actual results to differ
materially from those suggested by the forward-looking statements in this
release. The risks and uncertainties include, but are not limited to:
>> Risks related to the pricing and underwriting of our products, and the
subsequent establishment of reserves, such as:
o Successful implementation of the new-business entry model for personal
and commercial lines
o Our ability to appropriately price and reserve for changes in the mix
of our book of business
o Our ability to establish appropriate pricing
o Inflationary pressures on medical care costs, auto parts and repair,
construction costs and other economic factors that increase the
severity of claims
o The availability and pricing of our reinsurance, including coverage
for loss from terrorism and our ability to collect from our reinsurers
o Our ability to price for or exclude the risk of loss from terrorism on
our policies
>> Risks related to our Property & Casualty insurance strategy, such as:
o Our ability to achieve premium targets and profitability, including
realization of growth and business retention estimates
o Our ability to achieve overall expense goals
o Our ability to run off businesses that we have exited, or intend to
exit in the future, without incurring material unexpected charges
>> The competitive pricing environment, initiatives by competitors and other
changes in the competition
>> Regulatory, judicial and legislative risks, such as:
o Our ability to freely enter and exit lines of business
o Our ability to successfully obtain regulatory approval of rates and
underwriting guidelines, including price-tiered products and the use
of insurance scores that include credit information as a component
o Interpretation of insurance policy provisions by courts or tax
authorities, court decisions regarding coverage and theories of
liability, trends in litigation and changes in claims settlement
practices
o The outcome of any litigation against us
o Legislative and regulatory developments affecting the actions of
insurers, including requirements regarding rates, taxes, agent and
broker commissions and availability of coverage
>> Unusual loss activity, such as:
o Weather conditions, including the severity and frequency of storms,
hurricanes, hail, snowfall and winter conditions
o The occurrence of significant natural disasters, including earthquakes
o The occurrence of significant man-made disasters, such as terrorist
attacks or war
o The occurrence of bankruptcies that result in losses on insurance
products or investments
>> Financial and economic conditions, such as:
o Performance of financial markets
o Availability of bank credit facilities
o Fluctuations in interest rates
o General economic conditions
>> Operational risks, such as:
o Damage to our infrastructure or harm to our workforce resulting in a
disruption of our operations
o Internal or external fraud perpetrated against us
We assume no obligation to update any forward-looking statements contained in
this news release.
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[LOGO OMITTED]
Financial Supplement
First Quarter, 2005
On August 2, 2004, we completed the sale of our Life & Investments (L&I)
operations. We have presented the results of L&I as a Discontinued Operation in
all periods presented.
In 2005, we modified our duration calculation for the Property & Casualty (P&C)
portfolios to an effective duration calculation from an effective duration to
worst calculation. We have restated prior period duration figures on page SS-17.
This report is for informational purposes only. The financial statements and
financial exhibits included in this supplement are unaudited. These financial
statements and financial exhibits should be read in conjunction with the
financial statements filed with the Securities and Exchange Commission in the
Company's quarterly 10-Q and annual 10-K filings.
Neal Fuller
Vice President - Finance
206-545-5537
neaful@safeco.com
Safeco Corporation
Financial Measures Used by Safeco
(Amounts are in millions or thousands as specified, except ratio and per share
information.)
How We Report Our Results
Property & Casualty (P&C) businesses include the following segments:
Safeco Personal Insurance (SPI)
Auto
Property
Specialty
Safeco Business Insurance (SBI)
SBI Regular
SBI Special Accounts Facility
Surety
P&C Other
Corporate includes all other activities, primarily the financing of our business
activities.
Certain reclassifications have been made to the prior-period amounts to conform
to the current-period presentation.
In addition to financial measures presented in the consolidated financial
statements prepared in accordance with U.S. generally accepted accounting
principles (GAAP), we also use certain non-GAAP financial measures to analyze
and report our financial results. Management believes that these non-GAAP
measures, when used in conjunction with the consolidated financial statements,
can aid in understanding our financial condition and results of operations.
These non-GAAP measures are not a substitute for GAAP measures, and where these
measures are described we provide tables that reconcile the non-GAAP measures to
the GAAP measures reported in our consolidated financial statements.
Operating Revenues
Operating revenues is a non-GAAP financial measure used by management to analyze
the revenues of our P&C operations. It excludes net realized investment gains
and losses that can fluctuate significantly and distort a comparison between
periods. The following table provides a reconciliation of operating revenues to
revenues, the most directly comparable GAAP measure.
Three Months Ended
March 31
---------------------------
2005 2004
- -----------------------------------------------------------------------------------------------------------
Total Revenues $ 1,580.5 $ 1,498.3
Net Realized Investment Gains (33.5) (42.8)
---------------------------
Operating Revenues - Continuing Operations $ 1,547.0 $ 1,455.5
- -----------------------------------------------------------------------------------------------------------
Operating Earnings - Continuing Operations
Operating earnings from Continuing Operations is a non-GAAP financial measure
that we use to assess the profitability of our P&C and Corporate operations. In
the determination of operating earnings from continuing operations, we exclude
net realized investment gains and losses from Income from Continuing Operations.
Net realized investment gains and losses can fluctuate significantly and distort
a comparison between periods. In the third quarter of 2004 we also excluded the
loss on debt repurchases. The following table reconciles operating earnings to
Income from Continuing Operations, the most directly comparable GAAP measure.
Three Months Ended
March 31
---------------------------
2005 2004
- -----------------------------------------------------------------------------------------------------------
Income from Continuing Operations $ 212.0 $ 185.6
Net Realized Investment Gains, Net of Taxes (22.0) (27.8)
---------------------------
Operating Earnings - Continuing Operations $ 190.0 $ 157.8
- -----------------------------------------------------------------------------------------------------------
Operating Return on Equity
Operating return on equity is a ratio we calculate using non-GAAP measures. It
is calculated by dividing the annualized consolidated operating earnings (see
calculation below) for the most recent quarter by the average shareholders'
equity for the quarter using a simple average of the beginning and ending
balances for the quarter, excluding from equity after-tax unrealized investment
gains and losses on fixed maturities. This ratio provides management with an
additional measure to evaluate our results excluding the unrealized changes in
the valuation of our fixed maturities portfolio that can fluctuate between
periods. The following table reconciles operating return on equity to return on
equity, the most directly comparable GAAP measure.
Three Months Ended
March 31
---------------------------
(ANNUALIZED) 2005 2004
- -----------------------------------------------------------------------------------------------------------
Net Income $ 212.0 $ 236.2
Average Shareholders' Equity 3,955.3 5,279.0
Return on Equity Based on Annualized Net Income 21.4% 17.9%
Income from Discontinued Operations, Net of Taxes $ - $ 50.6
Net Realized Investment Gains from Discontinued Operations, Net of Taxes - (10.5)
---------------------------
Operating Earnings - Discontinued Operations - 40.1
Operating Earnings - Continuing Operations 190.0 157.8
---------------------------
Consolidated Operating Earnings $ 190.0 $ 197.9
---------------------------
Average Shareholders' Equity $3,955.3 $ 5,279.0
Unrealized Fixed Maturities Investment Gains, Net of Taxes (172.5) (1,393.4)
---------------------------
Adjusted Average Shareholders' Equity $3,782.8 $ 3,885.6
Consolidated Operating Return on Equity Based on Annualized
Operating Earnings 20.1% 20.4%
- -----------------------------------------------------------------------------------------------------------
Property & Casualty Net Written Premiums
Net written premium is a non-GAAP measure representing the amount of premium
charged for policies issued during the period. Premiums are reflected as revenue
in the Consolidated Statements of Income as they are earned over the underlying
policy period. Net written premiums applicable to the unexpired term of a policy
are recorded as unearned premiums on our Consolidated Balance Sheets. We view
net written premiums as a measure of business production for the period under
review and as a leading indicator of net earned premiums. The following table
reconciles net written premiums to net earned premiums, the most directly
comparable GAAP measure on our Consolidated Statements of Income.
Three Months Ended
March 31
---------------------------
2005 2004
- -----------------------------------------------------------------------------------------------------------
Total Property & Casualty Net Earned Premiums $ 1,428.4 $ 1,340.5
Change in Unearned Premiums 28.7 35.2
---------------------------
Total Property & Casualty Net Written Premiums $ 1,457.1 $ 1,375.7
- -----------------------------------------------------------------------------------------------------------
Property & Casualty Underwriting Profit (Loss) and Combined Ratios
Underwriting profit (loss) represents the net amount of earned premiums less
underwriting losses and expenses on a pretax basis. We view underwriting profit
(loss) as a critical measure to assess the underwriting effectiveness of the P&C
operations and to evaluate the results of these business units. The related
investment portfolio is managed separately from these underwriting businesses
and, accordingly, net investment income and net realized investment gains and
losses are discussed separately. The following table reconciles underwriting
profit (loss) to Income from Continuing Operations before Income Taxes, the most
directly comparable GAAP measure on our Consolidated Statements of Income.
Combined ratios are a standard industry measure of underwriting performance and
are calculated as losses and expenses expressed as a percentage of net earned
premiums.
Three Months Ended
March 31
---------------------------
2005 2004
- -----------------------------------------------------------------------------------------------------------
Income from Continuing Operations before Income Taxes $ 297.6 $ 259.5
Net Realized Investment Gains (33.5) (42.8)
Corporate Results before Income Taxes 13.0 29.1
Property & Casualty Net Investment Income (113.0) (111.7)
Restructuring Charges 0.2 1.3
---------------------------
Total Underwriting Profit $ 164.3 $ 135.4
- -----------------------------------------------------------------------------------------------------------
Other Information in this Supplement
Frequency, severity and loss cost information is on a newly reported, claims
incurred, basis which may be different from paid.
Catastrophes are events resulting in losses greater than $500,000, involving
multiple claims and policyholders.
Certain reclassifications have been made to the prior periods to conform to the
current presentation.
NM = Not Meaningful
Safeco Corporation
Key Metrics
(In Millions Except Per Share Data)
1ST 4TH 3RD 2ND 1ST
QTR QTR QTR QTR QTR YTD YTD
2005 2004 2004 2004 2004 2005 2004 Change
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net Income (Loss) $ 212.0 $ 179.8 $ (101.1) $ 247.5 $ 236.2 $ 212.0 $ 236.2 -10%
Net Income (Loss) Per Share 1.65 1.41 (0.76) 1.77 1.69 1.65 1.69 -2%
Net Income (Loss) Return on Equity
annualized 21.4% 18.8% -9.2% 18.7% 17.9% 21.4% 17.9% 3.5
Net Realized Investment Gains,
after tax $ 22.0 $ 10.6 $ 32.8 $ 55.2 $ 27.8 $ 22.0 $ 27.8 -21%
Operating Earnings from
Continuing Operations, after tax 190.0 169.2 51.8 193.7 157.8 190.0 157.8 20%
Operating Earnings from
Continuing Operations Per Share 1.48 1.32 0.39 1.38 1.13 1.48 1.13 31%
Consolidated Operating Return on Equity
(Pre-FAS 115) annualized 20.1% 18.8% 7.5% 21.9% 20.4% 20.1% 20.4% -0.3
Consolidated Operating Return on Equity
annualized 19.2% 17.7% 6.6% 16.9% 15.0% 19.2% 15.0% 4.2
Operating Revenues from
Continuing Operations $1,547.0 $ 1,551.8 $ 1,516.4 $ 1,470.9 $ 1,455.5 $ 1,547.0 $ 1,455.5 6%
% Chg Prior Year Same Qtr 6.3% 10.6% 10.9% 11.1% 13.2%
Property & Casualty
Combined Ratio 88.5% 88.8% 101.6% 85.4% 89.9% 88.5% 89.9% -1.4
Impact of Catastrophes 1.7% 2.8% 13.9% 2.1% 0.9% 1.7% 0.9% 0.8
Net Written Premiums $1,457.1 $ 1,378.4 $ 1,467.7 $ 1,454.0 $ 1,375.7 $ 1,457.1 $ 1,375.7 6%
% Chg Prior Year Same Qtr 5.9% 7.9% 11.6% 10.4% 14.1%
Net Earned Premiums $1,428.4 $ 1,436.5 $ 1,400.7 $ 1,351.4 $ 1,340.5 $ 1,428.4 $ 1,340.5 7%
% Chg Prior Year Same Qtr 6.6% 11.7% 12.0% 12.4% 15.3%
Book Value Per Share $ 31.33 $ 30.88 $ 29.38 $ 36.36 $ 39.77 $ 31.33 $ 39.77 -21%
% Chg Prior Year Same Qtr -21.2% -14.8% -17.5% -2.3% 20.5%
Book Value Per Share (Pre-FAS 115) $ 30.34 $ 29.16 $ 27.48 $ 30.20 $ 28.65 $ 30.34 $ 28.65 6%
% Chg Prior Year Same Qtr 5.9% 7.2% 8.4% 17.4% 16.2%
Safeco Corporation
Consolidated Statements of Income
(In Millions Except Per Share Data)
Three Months Ended
March 31
----------------------------------
2005 2004
--------------- ----------------
(Unaudited)
REVENUES
Earned Premiums $ 1,428.4 $ 1,340.5
Net Investment Income 118.6 115.0
Net Realized Investment Gains 33.5 42.8
--------------- ----------------
Total 1,580.5 1,498.3
--------------- ----------------
EXPENSES
Losses and Loss Adjustment Expenses 866.6 826.0
Amortization of Deferred Policy Acquisition Costs 243.5 226.9
Other Underwriting and Operating Expenses 151.2 154.1
Interest Expense 21.4 30.5
Restructuring Charges 0.2 1.3
--------------- ----------------
Total 1,282.9 1,238.8
--------------- ----------------
Income from Continuing Operations before Income Taxes 297.6 259.5
Provision for Income Taxes on:
Income from Continuing Operations before Net Realized
Investment Gains 74.1 58.9
Net Realized Investment Gains 11.5 15.0
--------------- ----------------
Total Provision for Income Taxes 85.6 73.9
--------------- ----------------
Income from Continuing Operations 212.0 185.6
Results from Discontinued Operations, Net of Taxes - 50.6
--------------- ----------------
Net Income $ 212.0 $ 236.2
=============== ================
INCOME PER SHARE OF COMMON STOCK - DILUTED
Income from Continuing Operations $ 1.65 $ 1.33
Results from Discontinued Operations, Net of Taxes - 0.36
-------------- ----------------
Net Income $ 1.65 $ 1.69
=============== ================
INCOME PER SHARE OF COMMON STOCK - BASIC
Income from Continuing Operations $ 1.67 $ 1.34
Results from Discontinued Operations, Net of Taxes - 0.36
--------------- ----------------
Net Income $ 1.67 $ 1.70
=============== ================
Dividends Declared $ 0.220 $ 0.185
Average Number of Shares Outstanding During the Period:
Diluted 128.2 140.0
Basic 127.1 138.9
Safeco Corporation
Condensed Balance Sheets
(In Millions)
March 31 December 31
2005 2004
--------------- ----------------
(Unaudited)
ASSETS
Total Investments * $ 10,300.5 $ 10,404.2
Cash and Cash Equivalents 354.8 251.9
Reinsurance Recoverables 353.6 355.4
Deferred Policy Acquisition Costs 377.2 382.2
Other Assets 3,100.7 3,192.4
--------------- ----------------
Total Assets $ 14,486.8 $ 14,586.1
=============== ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Loss and Loss Adjustment Expense Reserves $ 5,222.2 $ 5,209.3
Debt ** 1,332.9 1,332.9
Unearned Premiums and Other Liabilities 3,942.1 4,123.0
--------------- ----------------
Total Liabilities 10,497.2 10,665.2
--------------- ----------------
Common Stock, No Par Value
Shares Authorized: 300; Shares Reserved for Stock Awards: 8.6; 9.1
Shares Issued and Outstanding: 127.4; 127.0 655.1 641.8
Retained Earnings 2,947.8 2,763.8
Accumulated Other Comprehensive Income 386.7 515.3
--------------- ----------------
Total Shareholders' Equity 3,989.6 3,920.9
--------------- ----------------
Total Liabilities & Shareholders' Equity $ 14,486.8 $ 14,586.1
=============== ================
* See Investment Portfolio (SS-17) for more detail.
** See Capitalization (SS-18) for more detail.
Safeco Corporation
Continuing Operations Income Summary
(In Millions)
Three Months Ended
March 31
----------------------------------
2005 2004
---------------- ----------------
(Unaudited)
Income from Continuing Operations Before Income Taxes
- -----------------------------------------------------
Property & Casualty
Underwriting Profit $ 164.3 $ 135.4
Net Investment Income 113.0 111.7
Restructuring Charges (0.2) (1.3)
---------------- ----------------
Total Property & Casualty 277.1 245.8
Corporate (13.0) (29.1)
---------------- ----------------
Total 264.1 216.7
Net Realized Investment Gains 33.5 42.8
---------------- ----------------
Income Taxes $ 297.6 $ 259.5
=============== ================
Total Provision for Income Taxes $ 85.6 $ 73.9
- -------------------------------- =============== ================
After-Tax Income from Continuing Operations
- -------------------------------------------
Property & Casualty
Underwriting Profit $ 114.5 $ 92.5
Net Investment Income 83.3 81.5
Restructuring Charges (0.1) (0.8)
---------------- ----------------
Total Property & Casualty 197.7 173.2
Corporate (7.7) (15.4)
---------------- ----------------
Total 190.0 157.8
Net Realized Investment Gains 22.0 27.8
---------------- ----------------
Total Income from Continuing Operations $ 212.0 $ 185.6
=============== ================
Safeco Property & Casualty
Underwriting Profit (Loss) and Combined Ratios
(In Millions)
1ST 4TH 3RD 2ND 1ST
QTR QTR QTR QTR QTR YTD YTD
Net U/W Profit (Loss) 2005 2004 2004 2004 2004 2005 2004
- --------------------- ---------- ---------- ----------- ----------- --------- ---------- ----------
Safeco Personal Insurance
Auto $ 30.1 $ 41.1 $ 51.0 $ 61.0 $ 23.1 $ 30.1 $ 23.1
Property 56.0 54.3 14.2 79.3 61.4 56.0 61.4
Specialty 8.7 3.1 (4.3) 6.7 6.4 8.7 6.4
---------- ---------- ----------- ----------- --------- ---------- ----------
Total SPI 94.8 98.5 60.9 147.0 90.9 94.8 90.9
---------- ---------- ----------- ----------- --------- ---------- ----------
Safeco Business Insurance
SBI Regular 46.9 51.2 (59.7) 31.9 23.8 46.9 23.8
SBI Special Accounts Facility 10.2 11.4 (21.1) 17.5 18.5 10.2 18.5
---------- ---------- ----------- ----------- --------- ---------- ----------
Total SBI 57.1 62.6 (80.8) 49.4 42.3 57.1 42.3
---------- ---------- ----------- ----------- --------- ---------- ----------
Surety 14.8 11.6 10.0 11.5 9.3 14.8 9.3
P&C Other* (2.4) (11.0) (12.6) (10.2) (7.1) (2.4) (7.1)
---------- ---------- ----------- ----------- --------- ---------- ----------
Total Property & Casualty $164.3 $ 161.7 $ (22.5) $ 197.7 $ 135.4 $ 164.3 $ 135.4
========== ========== ========== ========== ========== ========== ==========
Net Combined Ratios (GAAP)
- --------------------------
Safeco Personal Insurance
Auto 95.7% 94.1% 92.4% 90.5% 96.3% 95.7% 96.3%
Property 75.4 76.7 93.9 65.1 73.1 75.4 73.1
Specialty 62.5 86.9 118.3 69.4 70.0 62.5 70.0
---------- ---------- ----------- ----------- --------- ---------- ----------
Total SPI 90.0 89.6 93.4 83.5 89.5 90.0 89.5
---------- ---------- ----------- ----------- --------- ---------- ----------
Safeco Business Insurance
SBI Regular 85.1 83.8 119.5 89.4 92.1 85.1 92.1
SBI Special Accounts Facility 90.3 89.4 119.1 83.8 84.2 90.3 84.2
---------- ---------- ----------- ----------- --------- ---------- ----------
Total SBI 86.4 85.2 119.4 87.9 89.9 86.4 89.9
---------- ---------- ----------- ----------- --------- ---------- ----------
Surety 75.1 79.5 81.3 75.7 79.6 75.1 79.6
P&C Other* NM NM NM NM NM NM NM
---------- ---------- ----------- ----------- --------- ---------- ----------
Total Property & Casualty 88.5% 88.8% 101.6% 85.4% 89.9% 88.5% 89.9%
========== ========== ========== ========== ========== ========== ==========
* P&C Other includes results for large commercial business accounts, commercial
specialty programs and London operations we placed in runoff and other product
lines that we have exited.
Safeco Property & Casualty
Net Written Premiums
(In Millions)
1ST 4TH 3RD 2ND 1ST
QTR QTR QTR QTR QTR YTD YTD
2005 2004 2004 2004 2004 2005 2004
------------ ----------- ----------- ----------- --------- ------------ -----------
Net Written Premiums
- --------------------
Safeco Personal Insurance
Auto $ 735.6 $ 677.4 $ 707.9 $ 655.4 $ 668.9 $ 735.6 $ 668.9
Property 207.3 210.6 248.1 252.8 206.6 207.3 206.6
Specialty 23.9 19.2 24.9 28.2 20.8 23.9 20.8
------------ ----------- ----------- ----------- --------- ------------ -----------
Total SPI 966.8 907.2 980.9 936.4 896.3 966.8 896.3
------------ ----------- ----------- ----------- --------- ------------ -----------
Safeco Business Insurance
SBI Regular 324.1 304.4 307.8 333.4 312.9 324.1 312.9
SBI Special Accounts Facility 105.5 106.6 115.4 107.6 117.8 105.5 117.8
------------ ----------- ----------- ----------- --------- ------------ -----------
Total SBI 429.6 411.0 423.2 441.0 430.7 429.6 430.7
------------ ----------- ----------- ----------- --------- ------------ -----------
Surety 59.7 58.3 64.1 60.3 48.7 59.7 48.7
P&C Other 1.0 1.9 (0.5) 16.3 - 1.0 -
------------ ----------- ----------- ----------- --------- ------------ -----------
Total Property & Casualty $ 1,457.1 $1,378.4 $1,467.7 $1,454.0 $1,375.7 $ 1,457.1 $ 1,375.7
============ =========== =========== =========== ========= ============ ===========
Net Written Premiums (Percent Change) Percent Change Over Prior Year Same Quarter Percent Change YTD
- ------------------------------------ ------------------------------------------- ---------------------
Safeco Personal Insurance
Auto 10.0% 11.7% 16.0% 16.2% 19.6% 10.0% 19.6%
Property 0.3 -1.9 0.6 -1.1 -0.7 0.3 -0.7
Specialty 14.9 7.3 9.2 9.3 8.9 14.9 8.9
------------ ----------- ----------- ----------- --------- ------------ -----------
Total SPI 7.9 8.2 11.5 10.8 13.9 7.9 13.9
------------ ----------- ----------- ----------- --------- ------------ -----------
Safeco Business Insurance
SBI Regular 3.6 7.6 9.3 8.1 10.2 3.6 10.2
SBI Special Accounts Facility -10.4 -3.4 11.3 13.6 21.3 -10.4 21.3
------------ ----------- ----------- ----------- --------- ------------ -----------
Total SBI -0.3 4.5 9.9 9.4 13.0 -0.3 13.0
------------ ----------- ----------- ----------- --------- ------------ -----------
Surety 22.6 24.6 28.5 28.6 38.4 22.6 38.4
P&C Other NM NM NM NM NM NM NM
------------ ----------- ----------- ----------- --------- ------------ -----------
Total Property & Casualty 5.9% 7.9% 11.6% 10.4% 14.1% 5.9% 14.1%
============ =========== =========== =========== ========= ============ ===========
Safeco Property & Casualty
Net Earned Premiums
(In Millions)
1ST 4TH 3RD 2ND 1ST
QTR QTR QTR QTR QTR YTD YTD
2005 2004 2004 2004 2004 2005 2004
---------- ---------- ---------- ---------- ---------- ----------- --------------
Net Earned Premiums
- ------------------
Safeco Personal Insurance
Auto $ 693.7 $ 694.6 $ 670.4 $ 643.5 $ 620.1 $ 693.7 $ 620.1
Property 227.8 232.8 232.1 227.5 228.2 227.8 228.2
Specialty 23.1 23.5 23.4 22.1 21.2 23.1 21.2
---------- ---------- ---------- ---------- ---------- ----------- ------------
Total SPI 944.6 950.9 925.9 893.1 869.5 944.6 869.5
---------- ---------- ---------- ---------- ---------- ----------- ------------
Safeco Business Insurance
SBI Regular 313.8 315.8 307.0 299.5 302.4 313.8 302.4
SBI Special Accounts Facility 105.9 108.1 110.5 108.0 116.7 105.9 116.7
---------- ---------- ---------- ---------- ---------- ----------- ------------
Total SBI 419.7 423.9 417.5 407.5 419.1 419.7 419.1
---------- ---------- ---------- ---------- ---------- ----------- ------------
Surety 59.4 56.3 53.7 47.6 45.4 59.4 45.4
P&C Other 4.7 5.4 3.6 3.2 6.5 4.7 6.5
---------- ---------- ---------- ---------- ---------- ----------- ------------
Total Property & Casualty $ 1,428.4 $1,436.5 $1,400.7 $1,351.4 $1,340.5 $ 1,428.4 $ 1,340.5
============ ========== ========== ========== ========== =========== ============
Net Earned Premiums (Percent Change) Percent Change Over Prior Year Same Quarter Percent Change YTD
- ------------------------------------- --------------------------------------------- ---------------------
Safeco Personal Insurance
Auto 11.9% 15.9% 16.8% 17.8% 18.8% 11.9% 18.8%
Property -0.2 - 1.0 -1.3 0.3 -0.2 0.3
Specialty 9.0 9.3 9.3 8.3 7.6 9.0 7.6
---------- ---------- ---------- ---------- ---------- ----------- ------------
Total SPI 8.6 11.4 12.2 12.0 13.0 8.6 13.0
---------- ---------- ---------- ---------- ---------- ----------- ------------
Safeco Business Insurance
SBI Regular 3.8 11.2 11.5 10.1 13.7 3.8 13.7
SBI Special Accounts Facility -9.3 5.9 9.8 15.9 32.8 -9.3 32.8
---------- ---------- ---------- ---------- ---------- ----------- ------------
Total SBI 0.1 9.8 11.0 11.6 18.4 0.1 18.4
============ ========== ========== ========== ========== =========== ============
Surety 30.8 30.9 34.3 23.6 41.4 30.8 41.4
P&C Other NM NM NM NM NM NM NM
---------- ---------- ---------- ---------- ---------- ----------- ------------
Total Property & Casualty 6.6% 11.7% 12.0% 12.4% 15.3% 6.6% 15.3%
========== ========== ========== ========== ========== =========== ============
Safeco Property & Casualty
Safeco Personal Insurance (SPI)
(In Millions Except Ratios)
1ST 4TH 3RD 2ND 1ST
QTR QTR QTR QTR QTR YTD YTD
2005 2004 2004 2004 2004 2005 2004
------------ ---------- ---------- --------- ---------- ---------- ----------
AUTO
- ----
Underwriting Profit $ 30.1 $ 41.1 $ 51.0 $ 61.0 $ 23.1 $ 30.1 $ 23.1
Loss and LAE Ratio 72.8% 73.4% 69.1% 68.0% 73.4% 72.8% 73.4%
Expense Ratio 22.9 20.7 23.3 22.5 22.9 22.9 22.9
------------ ---------- ---------- --------- ---------- ---------- ----------
Combined Ratio 95.7% 94.1% 92.4% 90.5% 96.3% 95.7% 96.3%
============ ========== ========== ========= ========== ========== ==========
Impact of Catastrophes 0.3% 0.2% 1.2% 1.4% 0.1% 0.3% 0.1%
Policies In Force (000's) 1,830.5 1,806.3 1,780.5 1,735.7 1,705.0
% Chg Prior Year Same Qtr 7.4% 8.8% 9.7% 10.0% 10.0%
Loss Trends (12 mos. Rolling)
Frequency -3.6% -2.4% -3.8% -2.4% -0.4%
Severity 7.4 6.7% 5.3% 4.8% 3.6
Total Loss Costs 3.5% 4.2% 1.3% 2.3% 3.2%
Retention 80.3% 80.4% 80.1% 79.8% 79.8%
New Business Policies (000's) 128.3 131.3 148.6 131.0 143.9
% Chg Prior Year Same Qtr -10.8% -5.9% 2.9% 13.5% 33.9%
Net Written Premiums $ 735.6 $ 677.4 $ 707.9 $ 655.4 $ 668.9
% Chg Prior Year Same Qtr 10.0% 11.7% 16.0% 16.2% 19.6%
Net Earned Premiums $ 693.7 $ 694.6 $ 670.4 $ 643.5 $ 620.1
% Chg Prior Year Same Qtr 11.9% 15.9% 16.8% 17.8% 18.8%
PROPERTY
- --------
Underwriting Profit $ 56.0 $ 54.3 $ 14.2 $ 79.3 $ 61.4 $ 56.0 $ 61.4
Loss and LAE Ratio 49.0% 45.8% 67.5% 38.1% 45.4% 49.0% 45.4%
Expense Ratio 26.4 30.9 26.4 27.0 27.7 26.4 27.7
------------ ---------- ---------- --------- ---------- ---------- ----------
Combined Ratio 75.4% 76.7% 93.9% 65.1% 73.1% 75.4% 73.1%
============ ========== ========== ========= ========== ========== ==========
Impact of Catastrophes 8.6% 5.6% 30.7% 6.8% 3.2% 8.6% 3.2%
Impact of Non-Cat Weather 5.1% 4.0% 5.2% 5.4% 4.9% 5.1% 4.9%
Policies In Force (000's) 1,349.4 1,351.8 1,368.7 1,393.1 1,423.2
% Chg Prior Year Same Qtr -5.2% -6.7% -7.7% -8.4% -8.7%
Retention 84.1% 83.7% 83.2% 83.1% 83.2%
New Business Policies (000's) 45.1 38.2 42.2 36.3 30.4
% Chg Prior Year Same Qtr 48.4% 17.2% 14.1% 6.5% 7.4%
Net Written Premiums $ 207.3 $ 210.6 $ 248.1 $ 252.8 $ 206.6
% Chg Prior Year Same Qtr 0.3% -1.9% 0.6% -1.1% -0.7%
Net Earned Premiums $ 227.8 $ 232.8 $ 232.1 $ 227.5 $ 228.2
% Chg Prior Year Same Qtr -0.2% 0.0% 1.0% -1.3% 0.3%
SPECIALTY
- ---------
Underwriting Profit (Loss) $ 8.7 $ 3.1 $ (4.3) $ 6.7 $ 6.4 $ 8.7 $ 6.4
Loss and LAE Ratio 35.5% 61.8% 93.3% 44.0% 45.0% 35.5% 45.0%
Expense Ratio 27.0 25.1 25.0 25.4 25.0 27.0 25.0
------------ ---------- ---------- --------- ---------- ---------- ----------
Combined Ratio 62.5% 86.9% 118.3% 69.4% 70.0% 62.5% 70.0%
============ ========== ========== ========= ========== ========== ==========
Impact of Catastrophes 1.4% 5.9% 26.9% 0.0% 0.0% 1.4% 0.0%
Safeco Property & Casualty
Safeco Business Insurance (SBI)
(In Millions Except Ratios)
1ST 4TH 3RD 2ND 1ST
QTR QTR QTR QTR QTR YTD YTD
2005 2004 2004 2004 2004 2005 2004
---------- ---------- --------- ---------- --------- ---------- -----------
SAFECO BUSINESS INSURANCE
- -------------------------
Underwriting Profit (Loss) $ 57.1 $ 62.6 $ (80.8) $ 49.4 $ 42.3 $ 57.1 $ 42.3
Loss and LAE Ratio 52.2% 49.2% 84.8% 53.2% 55.8% 52.2% 55.8%
Expense Ratio 34.2 36.0 34.6 34.7 34.1 34.2 34.1
---------- ---------- --------- ---------- --------- ---------- -----------
Combined Ratio (CR) 86.4% 85.2% 119.4% 87.9% 89.9% 86.4% 89.9%
========== ========== ========= ========== ========= ========== ===========
Impact of Catastrophes 0.7% 5.8% 26.1% 1.1% 0.9% 0.7% 0.9%
SBI REGULAR
- -----------
Underwriting Profit (Loss) $ 46.9 $ 51.2 $ (59.7) $ 31.9 $ 23.8 $ 46.9 $ 23.8
Loss and LAE Ratio 52.1% 49.6% 86.6% 55.6% 58.7% 52.1% 58.7%
Expense Ratio 33.0 34.2 32.9 33.8 33.4 33.0 33.4
---------- ---------- --------- ---------- --------- ---------- -----------
Combined Ratio (CR) 85.1% 83.8% 119.5% 89.4% 92.1% 85.1% 92.1%
========== ========== ========= ========== ========= ========== ===========
Impact of Catastrophes 0.7% 8.9% 26.0% 1.2% 0.8% 0.7% 0.8%
Policies In Force (000's) 507.2 511.0 511.2 511.5 508.6
% Chg Prior Year Same Qtr -0.3% 0.2% 0.3% 0.1% -1.7%
Retention 80.1% 79.8% 79.8% 79.7% 80.2%
New Business Policies (000's) 26.3 25.6 28.0 30.8 28.9
% Chg Prior Year Same Qtr -9.0% -8.2% -7.6% -1.0% 14.7%
Net Written Premiums $ 324.1 $304.4 $307.8 $333.4 $312.9
% Chg Prior Year Same Qtr 3.6% 7.6% 9.3% 8.1% 10.2%
Net Earned Premiums $ 313.8 $315.8 $307.0 $299.5 $302.4
% Chg Prior Year Same Qtr 3.8% 11.2% 11.5% 10.1% 13.7%
SBI SPECIAL ACCOUNTS FACILITY
- -----------------------------
Underwriting Profit (Loss) $ 10.2 $ 11.4 $ (21.1) $ 17.5 $ 18.5 $ 10.2 $ 18.5
Combined Ratio 90.3% 89.4% 119.1% 83.8% 84.2% 90.3% 84.2%
Impact of Catastrophes 0.7% -3.1% 26.3% 0.9% 1.1% 0.7% 1.1%
Safeco Property & Casualty
Surety, Other and Total
(In Millions Except Ratios)
1ST 4TH 3RD 2ND 1ST
QTR QTR QTR QTR QTR YTD YTD
2005 2004 2004 2004 2004 2005 2004
---------- ---------- ---------- ---------- ---------- ---------- ----------
SURETY
- ------
Underwriting Profit $ 14.8 $ 11.6 $ 10.0 $ 11.5 $ 9.3 $ 14.8 $ 9.3
Combined Ratio 75.1% 79.5% 81.3% 75.7% 79.6% 75.1% 79.6%
P&C OTHER *
- -----------
Underwriting Loss $ (2.4) $ (11.0) $ (12.6) $ (10.2) $ (7.1) $ (2.4) $ (7.1)
TOTAL PROPERTY & CASUALTY
- -------------------------
Underwriting Profit (Loss) $ 164.3 $ 161.7 $ (22.5) $ 197.7 $ 135.4 $ 164.3 $ 135.4
Loss and LAE Ratio 60.7% 60.1% 73.5% 57.5% 61.6% 60.7% 61.6%
Expense Ratio 27.8 28.7 28.1 27.9 28.3 27.8 28.3
---------- ---------- ---------- ---------- ---------- ---------- ----------
Combined Ratio (CR) 88.5% 88.8% 101.6% 85.4% 89.9% 88.5% 89.9%
========== ========== ========== ========== ========== ========== ===========
Impact of Catastrophes 1.7 2.8 13.9 2.1 0.9 1.7 0.9
---------- ---------- ---------- ---------- ---------- ---------- ----------
CR excluding Catastrophes 86.8% 86.0% 87.7% 83.3% 89.0% 86.8% 89.0%
========== ========== ========= ========== ========= ========== ===========
1ST 4TH 3RD 2ND 1ST
QTR QTR QTR QTR QTR YTD YTD
2005 2004 2004 2004 2004 2005 2004
---------- ---------- ---------- ---------- ---------- ---------- ----------
Catastrophes
- ------------
SPI - Auto $ 2.0 $ 1.2 $ 8.2 $ 9.0 $ 0.5 $ 2.0 $ 0.5
SPI - Property 19.6 13.0 71.3 15.5 7.4 19.6 7.4
SPI - Specialty 0.3 1.3 6.3 - - 0.3 -
Safeco Business Insurance 2.9 24.7 109.0 4.5 3.7 2.9 3.7
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total $ 24.8 $ 40.2 $ 194.8 $ 29.0 $ 11.6 $ 24.8 $ 11.6
========== ========== ========== ========== ========== ========== ==========
* P&C Other includes results for large commercial business accounts, commercial
specialty programs and London operations we placed in runoff and other product
lines that we have exited.
Safeco Property & Casualty
Statutory Information
(In Millions Except Ratios)
Three Months Ended
Loss and Loss Adjustment Expense (LAE) Reserves March 31
- ----------------------------------------------- ------------------------------
2005 2004
-------------- --------------
Loss and LAE Reserves, Beginning of Period $ 4,819.2 $ 4,649.2
Net Losses and LAE Incurred 866.5 826.0
Net Losses and LAE Paid (854.8) (789.1)
-------------- --------------
Loss and LAE Reserves, End of Period $ 4,830.9 $ 4,686.1
============== ==============
1ST 4TH 3RD 2ND 1ST
QTR QTR QTR QTR QTR
2005 2004 2004 2004 2004
-------------- -------------- -------------- -------------- --------------
P&C Balance Sheet
- -----------------
Total Capital and Surplus $ 3,630.0 * $ 3,430.9 $ 3,178.3 $ 3,245.1 $ 3,028.2
Ratio of Net Written Premiums (Annualized)
to Total Capital and Surplus 1.61 * 1.67 1.80 1.74 1.82
* Estimated
Safeco Corporation
Investment Portfolio
(In Millions)
Investment Portfolio (Market Value) 3/31/2005 % 12/31/2004 %
------------ ------------ ------------ -------------
Fixed Maturities - Taxable $ 6,957.4 67.5 % $ 7,084.8 68.1 %
Fixed Maturities - Nontaxable 2,223.8 21.6 2,209.5 21.2
Equity Securities 1,111.0 10.8 1,101.4 10.6
------------ ------------ ------------ -------------
Total Fixed Maturities & Equity Securities 10,292.2 99.9 10,395.7 99.9
Other Invested Assets 8.3 0.1 8.5 0.1
------------ ------------ ------------ -------------
Total Investment Portfolio $ 10,300.5 100.0 % $ 10,404.2 100.0 %
============ ============ ============ =============
Rating (Market Value) - Fixed Maturities 3/31/2005 12/31/2004
------------ ------------
AAA 43.7 % 43.0 %
AA 11.0 11.0
A 28.9 29.4
BBB 13.9 13.8
------------ ------------
Total Investment Grade 97.5 97.2
------------ ------------
BB or lower 1.6 1.8
Not Rated 0.9 1.0
------------ ------------
Total Below Investment Grade 2.5 2.8
------------ ------------
Total 100.0 % 100.0 %
============ ============
Average Rating A+ A+
============ ============
3/31/2005 12/31/2004 9/30/2004 6/30/2004 3/31/2004
---------- ----------- ---------- ---------- -----------
P&C Pretax Investment Income $ 113.0 $ 106.5 $ 111.0 $ 115.8 $ 111.7
Tax Rate on P&C Investment Income 26.28% 28.10% 28.59% 25.39% 26.95%
Pretax Investment Income $ 118.6 $ 115.0 $ 115.5 $ 119.1 $ 115.0
Tax Rate on Investment Income 26.64% 28.52% 28.78% 25.60% 27.12%
Fixed Maturities at Cost $ 8,986.8 $ 8,958.0 $ 8,824.7 $ 8,344.4 $ 7,797.0
Fixed Maturities at Market 9,181.2 9,294.3 9,188.2 8,561.2 8,311.7
Equity Securities at Cost 705.9 640.3 580.7 538.0 653.9
Equity Securities at Market 1,111.0 1,101.4 972.5 964.6 1,134.8
Total Cost $ 9,701.0 $ 9,606.8 $ 9,413.8 $ 8,892.8 $ 8,477.0
Total Market $ 10,300.5 $ 10,404.2 $ 10,169.1 $ 9,536.1 $ 9,472.6
% Fixed Maturities - Taxable (at market) 67.5% 68.1% 69.2% 68.1% 65.1%
% Fixed Maturities - Nontaxable (at market) 21.6% 21.2% 21.2% 21.7% 22.6%
% Equity Securities (at market) 10.8% 10.6% 9.5% 10.1% 12.0%
% Other 0.1% 0.1% 0.1% 0.1% 0.3%
P&C Market YTM on Fixed Maturities Portfolio 4.51% 4.06% 3.92% 4.35% 3.46%
P&C Book YTM on Fixed Maturities Portfolio 5.00% 5.02% 5.05% 5.18% 5.23%
P&C Duration of Fixed Maturities Portfolio* 4.55 4.74 4.64 4.72 4.74
* see note on page SS-1
Three Months Ended
Net Realized Investment Gains (After Tax) March 31
---------------------------
from Continuing Operations 2005 2004
------------ ------------
Gains on Securities Transactions $ 22.4 $ 30.8
Impairments (1.0) (3.0)
Other 0.6 -
------------ ------------
Net Realized Investment Gains $ 22.0 $ 27.8
============= ============
Safeco Corporation
Capitalization
(In Millions)
03/31/2005 12/31/2004 12/31/2003
---------- ----------- ----------
Short-Term Debt
$300 million* back up line of credit (unused) $ - $ - $ -
Long-Term Debt
6.875%, due 7/15/07 (non callable) 200.0 200.0 200.0
4.20%, due 2/1/08 (non callable) 200.0 200.0 200.0
4.875%, due 2/1/10 (non callable) 300.0 300.0 300.0
7.25%, due 9/1/12 (non callable) 230.0 230.0 375.0
8.072% debentures due 2037 402.9 402.9 876.3
(Callable at 104 in 2007)
------------- --------------- --------------
Total Debt $ 1,332.9 $ 1,332.9 $ 1,951.3
============= =============== ==============
Equity $ 3,989.6 $ 3,920.9 $ 5,023.3
============= =============== ==============
Total Capital (Debt + Equity) $ 5,322.5 $ 5,253.8 $ 6,974.6
============= =============== ==============
Debt to Capital 25.0% 25.4% 28.0%
Adjusted Debt** to Capital 23.5% 23.8% 25.5%
Debt to Equity 33.4% 34.0% 38.8%
Debt to Capital (excluding FAS 115) 25.7% 26.5% 34.1%
Adjusted Debt** to Capital (excluding FAS 115) 24.1% 24.9% 31.0%
Debt to Equity (excluding FAS 115) 34.5% 36.0% 51.7%
* $500 million in 2003
** 20% equity credit for 8.072% debentures due 2037